Room Mate Prepares To Enter Holiday Hotel Segment

18 October 2016 – Expansión

Room Mate Hotels, the hotel chain chaired by Enrique Sarasola (pictured above), is preparing to enter the vacation hotel segment and has set itself the goal of having 2,000 rooms in a number of hotels along the coast by 2020.

Specifically, the group founded in 2005, which already has a presence in twelve cities and six countries, plans to inaugurate this new line of business next summer. To that end, the chain is currently analysing different projects and studying operations in the Balearic Islands, Canary Islands, Cataluña, Costa del Sol and Riviera Maya (México).

“We have taken this decision after listening to requests from our customers, who have been asking us for a long time now to take our philosophy and creativity to beach destinations”, explained Sarasola.

The Director said that the group currently has around fifteen projects on the table at various phases of analysis to determine whether they fit with its standards. “The company is being refinanced. This step forms part of our strategy to grow through turnkey projects”, he added.

The chain signed a €54 million refinancing agreement with Citigroup at the end of last year. Half of that figure will be used to pay off debt and the remainder will be used to finance growth.

The Chairman of Room Mate considers that this move is an important step in the company’s plans: “We want to take the essence of Room Mate to exclusive vacation destinations, specifically: excellent locations, superb design…and innovative concepts”.

In this way, the group’s new beach front destinations will include a wide range of leisure facilities, bars, restaurants, beach clubs and terraces, said Sarasola. “In some locations, we will opt for all inclusive formats, in others we will place the emphasis on the music or on the leisure facilities”, he said.

According to the company’s forecasts, Room Mate will close 2016 will operating revenues of €72 million, which represents an increase of 36% with respect to 2015 (€52.9 million). In the first eight months of this year alone, the hotel chain recorded revenues of €44 million.

Room Mate’s properties will close the year with an occupancy rate of more than 87%, whislt the RevPar (revenues per available room) will amount to €133.42, up by 14% compared to last year.

Room Mate Hotels has more than 1,500 rooms in 23 hotels and plans to open another eight establishments over the next few months.

Sarasola said that the chain has achieved record results in all of its destinations this summer, with the exception of Istanbul, which has suffered as a result of the terrorist attacks. “We are not planning to abandon the destination. We are not going to allow terrorism to change our plans”, he said.

Renovation

In Spain, the Director encourages the Public Administrations to help the sector to renovate the hotel stock…to position Spain as the “Florida of Europe”. He also acknowledged that the lack of Government “is not good for the industry”.

The Executive recently strengthened his commitment to Room Mate by buying an additional 20% stake in the hotel chain that he founded more than ten years ago; he now controls 70% of the share capital. The remaining 30% is held by Sandra Ortega Mera, through the company Rosp Corunna.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Unemployment Rose Slightly In August As Tourism Boom Waned

5 August 2016 – Reuters

Spanish unemployment rose for the first time in five months in August, coinciding with the tail-end of a bumper tourism season, however, the underlying pattern suggests that a long but gradual recovery in the labor market remains on track.

A record summer for tourist arrivals has helped the economy shrug off a prolonged period of political uncertainty and, seasonally-adjusted, the number of people registered as jobless fell by 24,462 people in August, according to Labour Ministry data on Friday.

But compared with July, the jobless number rose by 0.39%, or 14,435 people, leaving 3.7 million out of work.

Increases in unemployment are common in Spain in August, as factories reduce activity in what is the peak holiday season and many private sector teachers fall off the social security registers that track job creation in the lull that precedes the start of the new school term.

Hotels and restaurants, meanwhile, continued to create jobs last month though the services sector as a whole laid off staff, the ministry said.

With the bumper summer for tourism drawing to a close, Spain faces a fresh challenge to keep its economic recovery on track as one of the major drivers of growth and employment wanes.

Two inconclusive elections in the past eight months have left the country unable to form a new government amid a stand-off between parties on the right and left, and the impasse may start to weigh more heavily on the turnaround if it drags on, acting Economy Minister Luis de Guindos said this week.

Later on Friday, Conservative acting Prime Minister Mariano Rajoy faces a second confidence vote in parliament for a second term in office. If he loses, as expected, the countdown would be triggered to a likely third election in December.

A gradual recovery in Spain’s jobs market, which collapsed in 2008 when a real estate bubble burst and the economy sank into a long recession, has so far underpinned a consumer spending rebound.

That in turn has helped economic growth stay robust in the first two quarters of the year, meaning Spain can ill afford any slowdown in job creation.

Compared to August last year, there were just over 519,000 more people in work, up 3%, the ministry said.

But on a month-on-month basis, nearly 145,000 fewer people were registered as working, the biggest drop between July and August since 2008.

Original story: Reuters (by Sarah White)

Edited by: Carmel Drake